Shiller: Rumor of Housing Market’s Death Exaggerated

While many experts have warned of a crash in the housing market after recent news of plunging sales, Yale economist Robert Shiller says that’s overdoing it.

Existing home sales dropped 27 percent in July from June to at least an 11-year low.

“Let’s not overreact to these latest sales numbers,” Shiller, co-founder of the S&P/Case-Shiller Home Price Index, told Bloomberg. “July is an anomalous month.”

That’s because June 30 was the original closing deadline for homebuyers to receive an $8,000 tax credit. While the deadline was ultimately extended to Sept. 30, many buyers rushed to close by the end of June.

To be sure, “Opinion about the market is weakening and may result in another decline in home prices going forward,” Shiller said.

But last month’s survey of forecasters by his MacroMarkets firm showed they expect prices to be flat for the rest of the year. “They could (even) be going up a couple percent a year,” Shiller said.

“Dire forecasts, while they’re possible and I’m sometimes in that camp, aren’t the consensus.”

Still, government intervention is needed in the market, he says. “There’s a lot for the government to be doing.”

Shiller and others agree that if home prices do tumble, the economy will suffer.

While many experts have warned of a crash in the housing market after recent news of plunging sales, Yale economist Robert Shiller says that s overdoing it.
Existing home sales dropped 27 percent in July from June to at least an 11-year low.
Let s not overreact to these...